The following information pertains to the next two questions. Z Company purchased an asset for $24,000 on January 1, Year 1. The asset was expected to have a four-year life and a $4,000 salvage value.

1. The amount of depreciation expense for Year 3 using double-declining-balance would be

1. $2,000.
2. $3,000.
3. $6,000.
4. $12,000.

2. Assume that Z Company uses straight-line depreciation. If, on January 1, Year 4, Z Company sells the asset for $10,000, the statement of cash flows would report a

1. $1,000 cash inflow from gain on the sale of the asset in the operating activities section.
2. $10,000 cash inflow from an asset disposal in the investing activities section.
3. $9,000 cash inflow from an asset disposal in the financing activities section.
4. a and c.